Presidio Valley Farmers Ass'n v. Brock

• Citation: 765 F.2d 1353
• Decision Date: 25 July 1985
• Docket Number: No. 84-1432,84-1432
• Parties: 103 Lab.Cas. P 34,714 PRESIDIO VALLEY FARMERS ASSOCIATION, Plaintiff-Appellee, Cross-Appellant, v. William E. BROCK, Secretary of Labor, and U.S. Department of Labor, et al., Defendants, Antonio Montelongo, et al., Defendants-Intervenors-Appellants, Cross-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 1353

765 F.2d 1353

103 Lab.Cas. P 34,714

PRESIDIO VALLEY FARMERS ASSOCIATION, Plaintiff-Appellee, Cross-Appellant, v. William E. BROCK, Secretary of Labor, and U.S. Department of

Labor, et al., Defendants,

Antonio Montelongo, et al.,

Defendants-Intervenors-Appellants, Cross-Appellees.

No. 84-1432.

United States Court of Appeals, Fifth Circuit.

July 25, 1985.

Texas Rural Legal Aid, Inc., David G. Hall, Weslaco, Tex., and Edward J. Tuddenham, Hereford, Tex., for defendants-intervenors-appellants, cross-appellees.

Thomas Bacas, Washington, D.C., for plaintiff-appellee, cross-appellant.

Appeals from the United States District Court for the Western District of Texas.

Before THORNBERRY, RUBIN and HIGGINBOTHAM, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Some 250 Mexican nationals employed by the Presidio Valley Farmers Association and its grower members during the 1978 harvest season complain of numerous violations of the Farm Labor Contractor Registration Act and of breaches of the promised terms of employment. The workers prevailed below and both sides appealed. Most of the issues presented to us were resolved in Salazar v. PVFA, 765 F.2d 1334 (5th Cir.1985), a related case we decide today, and we answer them with reference to that decision. Two issues are not identical to those presented in Salazar. On those points we vacate and remand the district court's award of damages for breaches of the work agreement and reverse the judgment below insofar as it was assessed against the individual growers jointly and severally for the FLCRA violations of the PVFA.

I

This appeal is a sequel to Salazar and we reference the statement of facts set out in that opinion. We add only the following paragraphs which describe additional circumstances relevant to this appeal.

In the winter and spring of 1978, while PVFA and its members were still employing Mexican nationals who held H-2 visas issued in June 1977, the Association began plans to obtain labor for the 1978 harvest. PVFA was essentially the same organization it had been before, except that in November 1977, it incorporated as a non-profit corporation under the laws of the State of Texas. The stated purpose of PVFA was, as before, "to contract for and obtain migrant labor for the use of its members."

The Department of Labor again refused to certify PVFA's petitions to import alien labor, and this time the INS declined to issue the visas without certification. Agents from DOL had investigated the work conditions provided in the 1977 harvest season and had reported numerous violations of the conditions of employment required by its H-2 regulations. In the face of such abuses, INS was unwilling to issue the requested visas.

By May of 1978 PVFA and its grower members were desperate for harvest workers. Claiming that the Valley's onion crop was "rotting in the fields," PVFA petitioned the federal district court in El Paso on behalf of its grower members and sought an injunction requiring DOL to issue certification for the requested workers and requiring INS to issue visas for them. The court issued the injunction, but conditioned its issuance on PVFA's compliance with the minimum terms of work required by DOL's H-2 regulations. These terms included a 3/4 work guarantee, a wage of $2.97 per hour, a $5 per day housing allowance, an $8 per week transportation allowance, and a promise to pay travel expenses for all workers who travelled into the area from outside Presidio/Ojinaga. In 1978 these conditions of employment were codified at 20 C.F.R. Sec. 655.200 et seq.

Shortly thereafter, two H-2 visa recipients, Estaban Zuniga and Melquiades Lara, sought to intervene in the injunction suit to assert a counterclaim against PVFA on behalf of a class composed of all H-2 workers certified under the 1978 petitions. The intervenors alleged that despite the conditions imposed by the district court when it issued its injunction, PVFA and its grower members were not honoring the terms and conditions of employment required by the H-2 regulations. The intervention petition was not granted until March 18, 1981, and approximately one year later, the case was transferred to the Pecos division, the court that was handling Salazar. Both cases involved many of the same parties. In December 1982 the court granted the workers leave to amend their counterclaim to allege violations of the FLCRA and to add as defendants PVFA's member growers. ¹ The charges made in the counterclaim were substantially the same as those made in the complaint in Salazar, and the court handled the two cases in a similar fashion.

As in Salazar the workers' petition for class certification was denied on the basis that common issues did not predominate with respect to liability and damages, and the case therefore proceeded with some 250 named intervenors. ² Although the court did not need to determine the terms and conditions of the employment agreement as it had in Salazar, ³ it utilized an identical procedure to that used in Salazar to determine liability and damages for the breaches of the FLCRA and the work agreement. In fact, the liability/damages trial described in Salazar was the same trial used to assess liability and damages in the instant case. The court also considered motions for summary judgment analogous to those filed in Salazar, motions supported by the workers' answers to defendants' interrogatories.

As in Salazar, the workers did not seek actual damages and instead requested the court to award liquidated damages under the FLCRA both for the violations of that act and for defendants' breaches of the work agreement. The damages awarded by the district court were, for the most part, identical to those determined in Salazar. The court assessed liability and damages against PVFA and its grower members jointly and severally for all of the found violations of the FLCRA and breaches of the work agreement.

Both sides appeal, raising many of the same issues we resolved in Salazar. The workers' complaints about the damages award for breaches of the work agreement differ slightly from those made in Salazar, and defendants bring one additional point, arguing that because PVFA was incorporated under Texas law in 1978, its individual members cannot be held vicariously liable for the damages assessed against PVFA.

II

We address first those issues in this appeal that are controlled by our decision in Salazar. That case disposes of the workers' complaints regarding the court's liquidated damages awards of $15.00 for the various violations of the FLCRA and those regarding the court's refusal to certify as a class under Fed.R.Civ.P. 23(b)(3) the H-2 workers employed during the 1978 harvest season. ⁴ Salazar also forecloses defendants' claims that PVFA did not function as a farm labor contractor, that it did not function as a farm labor contractor with respect to these workers, and that its violations of the FLCRA were not intentional. ⁵

III

Both the workers' and the defendants' complaints about the district court's damage award for breaches of the work agreement are similar to those made in Salazar. The workers complain that the district court erred in refusing to award damages for defendants' breach of the 3/4 work guarantee and in limiting the award to those workers employed on a piece rate basis. Defendants again challenge the trial/summary judgment procedure employed by the court to determine liability and damages.

As in Salazar, we vacate the award of damages for breaches of the work agreement so that the district court can make findings on defendants' liability for the asserted breaches of the 3/4 work guarantee and the damages, if any, to be awarded for that breach. The court should explain as well its basis for awarding no damages to non-piece rate workers for the alleged breaches of the work agreement. Finally, on remand the court should obtain express consent from all counsel on the procedures to be followed in assessing liability and damages for the breaches of the work agreement.

IV

The district court made no distinction between PVFA and its members when it assessed liability and damages in the instant case. The court rejected defendants' complaints that the workers should not have been permitted to amend their counterclaim to add the individual growers as defendants ⁶ but did not address the additional defense that the growers could not be held liable under the FLCRA for what PVFA, the corporation, had done. The court simply stated: "PVFA breached statutory and regulatory duties imposed by FLCRA during [the 1978] growing season, and ... the individual dues paying members of PVFA were jointly responsible for the statutory damages resulting from the violations...."

On appeal the individual grower defendants reassert the argument made below that, under Texas law, "the members of a non-profit corporation shall not be personally liable for the debts, liabilities, or obligations of the corporation." Tex.Rev.Civ.Stat.Ann. art. 1396-2.08(...